Description of the model

Comments

Wouter Den Haan (06/04/2007)

This document shows that the traditional R-square measure might be misleading in assessing the accuracy in models with heterogeneous agents and aggregate risk. It provides an alternative procedure to check for accuracy that consists of alternative accuracy tests and exercises that can be used to confirm the tests or to evaluate the importance of possible inaccuracies.

Algan and Juillard (03/20/2007)

In SITE 2004, we agreed to proceed at least in three steps: - Solve the incomplete market economy with only idiosyncratic risks and exogenous interest rates. Compare the accuracy of the different methods to solve for individual policy rules. - Solve the incomplete market economy with only idiosyncratic risks but with endogenous interest rates. Proceed to the same accuracy comparison. - Solve the incomplete market economy with both aggregate risks and idiosyncratic risks. We agreed to all work with the same specification and to start from a common benchmark specification. The details of the model and of the parameterization are given in the attached document.

JedcTestsuiteWiki: ModelsDescription (last edited 2009-03-25 17:13:22 by localhost)